JLL’s perspective: Private residential units sold by developers in July 2015

Singapore, 17 August 2015 – Developer sales in July surged to 1,594 units (excluding ECs), more than four times the number of units sold in June 2015 and three times of that a year ago in July 2014. Excluding High Park Residences, the largest development launched in the month, developer sales volume in July dropped to just 425 units (excluding ECs), fairly stable from that observed in the previous month. In fact about 70 per cent of the transactions came entirely from newly-launched projects this month, the bulk of which came from just a single project: High Park Residences. The remaining 30 per cent came from previously launched developments, pointing to the overall tepid demand.

High Park Residences, a 1,390-unit development located next to Thanggam LRT station and near Seletar Mall, is the highlight of the month with 1,186 units freshly launched. The project’s location, supported by various amenities such as the LRT station and the shopping mall, together with its affordable median launch price of $989 psf has helped to find buyers for 1,169 units. Sengkang is not a new estate and there is latent/underlying upgrader demand from existing residents living in the neighbourhood. This is possibly one factor driving the overall better performance of the two projects in the neighbourhood – High Park Residences and Riverbank @ Fernvale, achieving remarkable sales rate of over 80 per cent to date. ECs also recorded high transaction volumes with launches of two major projects, The Brownstone (187 units sold at median price of $818 psf) and The Vales (79 units sold at median price of $788 psf).

Dr Chua Yang Liang, Head of Research for Singapore and South East Asia, said: “In today’s market condition, the pricing of projects is a no brainer – affordability is the crux. Keeping the total quantum price for a decently sized unit within the affordable range of S$600,000 to S$1.4 million is key to a successful project. Maturing neighbourhoods provide the underlying upgrader population, and as long as the policies on the income ceiling for HDB flats do not change, one should expect such well-located and priced private condominium projects to perform well going forward.”

“In my opinion, this stunning performance in July is an exception and it is not likely to cause a major shift in our forecast on the overall transaction volume. Towards this end, I hold on to my previously held view that new sales in 2015 should remain at between 6,500 to 7,500 units,” added Dr Chua.